EXHIBIT 2
STOCK OPTION AND VOTING AGREEMENT
---------------------------------
Between
XXXXXXXX XXXXXXX
and
HUB INTERNATIONAL LIMITED
Dated as of January 19, 2001
----------------------------
STOCK OPTION AND VOTING AGREEMENT dated as of January 19,
2001, between Xxxxxxxx Xxxxxxx (the "Stockholder"), a stockholder of Xxxx Group
Inc., a Delaware corporation (the "Company"), and Hub International Limited, an
Ontario corporation ("International").
WHEREAS, the Agreement and Plan of Merger dated the date
hereof between the Company, International and 416 Acquisition Inc., a Delaware
Corporation and a wholly-owned subsidiary of International ("Merger Sub"), as
amended from time to time (the "Merger Agreement"), provides, among other
things, that the Merger Sub will merge with and into the Company as contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the record
and beneficial owner of 40,234 shares of Common Stock, par value U.S.$.01 per
share, of the Company (the "Common Shares") (the Stockholder's shares of Common
Stock together with any Common Stock acquired after the date hereof, including
upon the exercise of warrants or options, the conversion of convertible
securities or otherwise, are referred to as the "Shares");
WHEREAS, as a condition to the willingness of International to
enter into the Merger Agreement, International has requested that the
Stockholder agree, and in order to induce International to enter into the Merger
Agreement, the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, as of the date hereof, International and certain
other holders of Common Stock are entering into stock option and voting
agreements whereby, among other things, such stockholders are granting options
to International (the "Remaining Options") for the Common Stock held by such
stockholders.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
----------------
SECTION 1.01. Voting Agreement. The Stockholder, from and
after the date hereof and until this Agreement shall have been terminated in
accordance with Article VI hereof, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, will vote (or cause to be voted) the Shares (i) in favor of the
approval and adoption of the Merger Agreement, the Merger and all of the
transactions contemplated by the Merger Agreement, and this Agreement, (ii)
against any merger, consolidation, sale of assets, recapitalization or other
business combination involving the Company (other than the Merger) or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which would result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled, and (iii)
in favor of any
other proposal as may be necessary to consummate the Merger if such proposal is
neutral or advantageous to the Stockholder and such proposal is reasonably
feasible and is not contrary to applicable laws and regulations. The Stockholder
shall not enter into any agreement or commitment with any person or entity to
vote or give instructions in any manner inconsistent with this Section 1.01.
ARTICLE II
THE OPTION
----------
SECTION 2.01. Grant of Option. The Stockholder hereby grants
to International an irrevocable option ("the Option") to purchase the Shares in
the manner and for the Purchase Price (as defined below) set forth below in this
Article.
SECTION 2.02. Exercise of Option. (a) The Option may be
exercised by International as a whole together with the Remaining Options but
not in part, at any time prior to 5:00 p.m. (Toronto time) on the seventh
calendar day following the termination of the Merger Agreement, provided, that
International may not exercise the Option if the Company has terminated the
Merger Agreement after notice to International of a breach by International of
the Merger Agreement (an "International Termination Event").
(b) If prior to the termination of the Merger Agreement,
there shall have been made an announcement by a third party or notice by the
Company to International of a Superior Proposal, as that term is defined in
Section 9.04(m) of the Merger Agreement, and the Merger Agreement is terminated,
International may elect to (i) exercise the Option pursuant to paragraph (a) of
this Section 2.02, or (ii) within seven calendar days after such termination
inform the Stockholder in writing that it will not exercise the Option but will
participate in the proceeds received by the Stockholder from any consummation of
any sale of the Stockholder's Shares (pursuant to such Superior Proposal or
otherwise) that closes within one year after termination of the Merger Agreement
by receiving from the Stockholder the Participation Amount as defined in this
paragraph (b). The Stockholder will promptly upon receipt by it pay to
International 50% of the proceeds (net of expenses and transfer taxes) it
receives from the closing of a sale of the Stockholder's Shares in excess of
U.S.$14 per Share (the "Participation Amount") provided however for purposes of
this Article II only "Shares" shall be defined as the Stockholder's shares of
Common Stock owned as of the date hereof, which shall include shares of Common
Stock issued from the date hereof upon the exercise options or warrants, the
conversion of convertible securities or otherwise, but shall not include any
Common Stock acquired by the Stockholder by purchases in the open market from
the date hereof.
(c) If International decides to exercise the Option,
International shall send a written notice to the Stockholder of its intention to
exercise the Option, specifying the place, the time and the date (the "Closing
Date") of the closing (the "Closing") of the purchase. The Closing Date shall
occur on the fifth business day after the date on which such notice is
delivered.
(d) At the Closing, the Stockholder shall deliver to
International (or its designee) all of the Shares by delivery of a certificate
or certificates evidencing the Shares duly
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endorsed to International or accompanied by stock powers duly executed in favor
of International, with all necessary stock transfer stamps and signature
guarantees affixed.
SECTION 2.03. Purchase Price. (a) The purchase price for each
Share shall be U.S.$14 payable, as adjusted in accordance with the provisions of
Section 2.08 of the Merger Agreement, if applicable, as follows: (A) net amount
of U.S.$9.3334 in cash, without interest thereon, (the "Cash Component") and (B)
U.S.$4.6666 principal amount of a Parent Debenture (as defined in the Merger
Agreement) (the "Debenture Component" and together with the Cash Component, the
"Purchase Price"). If pursuant to Section 2.04 of the Merger Agreement, Parent
elects to increase the Cash Component and decrease the Debenture Component then
the Parent shall make the same adjustment to the Purchase Price.
(b) In the event that subsequent to International
exercising its Option, any acquisition (including by way of amalgamation or
merger) of the Company's Common Stock (in whole or in part), or all or any
substantial portion of the assets or business of the Company, in any case by
International or any of its affiliates, is consummated, International shall
distribute to the Stockholder 50% of the consideration per Share in excess of
U.S.$14 that would have been paid to the Stockholder if the Option were not
exercised. Such consideration shall be paid by International at the same time
and in the same manner as such consideration is paid to the stockholders of the
Company.
(c) If International shall have exercised its Option
pursuant to Section 2.02(b) and shall have disposed of the Company's Common
Stock acquired pursuant to such Option as a result of a Superior Proposal,
International shall distribute to the Stockholder securities or cash with a
value per Share equal to 50% of the cash or securities (net of expenses and
transfer taxes) in excess of U.S.$14 per Share acquired under such Superior
Proposal ("Excess Proceeds"). If the consideration received by International in
the Superior Proposal includes securities, the portion of the Excess Proceeds
that is paid over to the Stockholder will be satisfied with securities and cash
in the same proportion as the portion of securities and cash received by
International that constitutes Excess Proceeds. For purposes of the foregoing
only, the value of any such securities, if not specifically stated in the
agreement or other documentation entered into in connection with the Superior
Proposal by the parties thereto, shall, except as may be agreed between the
Stockholder and International, be deemed to be the fair value determined by an
independent investment banker of recognized standing appointed by International.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
-------------------------------------------------
The Stockholder hereby represents and warrants to
International as follows:
SECTION 3.01. Valid Organization and Execution. (a) In the
case of a Stockholder that is not a natural person: (i) the Stockholder is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization and has all necessary corporate or partnership
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(ii)
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the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action (corporate or partnership) on the part of the Stockholder; and (iii) this
Agreement has been duly executed and delivered by or on behalf of the
Stockholder. In the case of a Stockholder that is a natural person: (i) the
Stockholder has full legal right, power and authority to enter into this
Agreement and to perform such Stockholder's obligations hereunder without the
need for the consent of any other person or entity; and (ii) this Agreement has
been duly authorized, executed and delivered by such Stockholder.
SECTION 3.02. No Conflict. The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder (i) shall not, result in the creation of a lien or encumbrance
on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Stockholder is a party or by which the Stockholder or the Shares is bound or
affected, (ii) to the knowledge of the Stockholder, does not contravene or
violate any laws, rules or regulations applicable to it, him or her; (iii) in
the case of a Stockholder who is not a natural person, conflict with or violate
the Certificate of Incorporation or By-Laws or similar organizational document
of the Stockholder, and (iv) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority,
domestic or foreign, except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, or the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Xxxxxx Act").
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record and beneficial owner of the number of shares of Common
Stock set forth in the second recital. Such Shares are all the securities of the
Company owned, either of record or beneficially, by the Stockholder. The Shares
are owned by the Stockholder free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever except under applicable securities laws. The Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. At the Closing, such Stockholder will deliver good
and valid title to the Shares free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement or applicable securities laws.
SECTION 3.04. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Stockholder.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
-----------------------------------------------
International hereby represents and warrants to the
Stockholder as follows:
SECTION 4.01. Due Organization, Etc. International is a
corporation duly organized and validly existing under the laws of Ontario.
International has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by International have been duly authorized by
all necessary corporate action on the part of International. This Agreement has
been duly executed and delivered by International.
SECTION 4.02. No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by International do not, and the
performance of this Agreement by International will not, (i) conflict with or
violate the Articles of Incorporation or By-laws of International; or any law,
rule or regulation to which International is subject and (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental authority, domestic or foreign, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, or the
Xxxx-Xxxxx Xxxxxx Act.
SECTION 4.03. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of International.
ARTICLE V
COVENANTS OF THE STOCKHOLDER
----------------------------
SECTION 5.01. No Disposition or Encumbrance of Shares. The
Stockholder, except as contemplated by this Agreement, will not (i) sell,
transfer, tender, assign, contribute to the capital of any entity, hypothecate
or otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, any of the Shares (or agree or consent
to, or offer to do, any of the foregoing), (ii) take any action that would have
the effect of preventing or disabling the Stockholder from performing its
obligations hereunder, or (iii) directly or indirectly, initiate, solicit or
encourage any person to take actions that could reasonably be expected to lead
to the occurrence of any of the foregoing.
SECTION 5.02. No Solicitation of Transactions. The
Stockholder, between the date of this Agreement and the date of termination of
this Agreement, will not and will not authorize or, to the extent it is within
the Stockholder's power, permit any of the Stockholder's related or subsidiary
companies and trusts, partners, management, shareholders or trustees, or any of
such Stockholder's related or subsidiary companies and trusts, and financial
advisers, investment dealers or others acting as agent or otherwise for such
Stockholder or any of the foregoing, except in dealing with International and
Merger Sub or otherwise in furtherance of the
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Merger, to provide information or access for review, enter into any agreement,
have any discussions, negotiations or correspondence or take any other action
related to or with a view to soliciting, encouraging, assisting in or
cooperating with any offer or proposal for, or which would have an effect
comparable to any acquisition (including by way of amalgamation or a merger) of
Common Stock (in whole or in part) or any material portion of the Company's or
any subsidiary of the Company's assets or business, any financing of any
acquisition thereof or financing of the Company or any subsidiary of the Company
or any material change in the management or operation (including by way of
material divestiture, partnership or joint venture) of the business of the
Company or any subsidiary of the Company. The Stockholder immediately shall
cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any persons conducted heretofore with
respect to any of the foregoing; provided that in the case of a Stockholder who
is a member of the Board of Directors of the Company (a "Director"), nothing in
this Section 5.02 shall be construed as interfering with or limiting such
Director's ability to comply with Section 6.04 of the Merger Agreement, as
required. Such Stockholder by signing this Agreement hereby acknowledges that
any actions taken by such Stockholder or any other person pursuant to Section
6.04(b) of the Merger Agreement shall have no effect on his or her obligations
or his or her full performance hereunder or on the rights of International
hereunder.
SECTION 5.03. Regulatory and Other Authorizations; Notices and
Consents. The Stockholder agrees to use all reasonable efforts to cooperate with
International in supporting and defending this Agreement against any third party
and in obtaining all authorizations, consents, orders and approvals of all
governmental authorities and officials that may be or become necessary for the
execution and delivery of, and the performance of its, his or her obligations
pursuant to, this Agreement. Each party hereto agrees to make an appropriate
filing, if necessary, pursuant to the Xxxx-Xxxxx Xxxxxx Act.
ARTICLE VI
TERMINATION
-----------
SECTION 6.01. Termination. This Agreement, except for Section
2.02(b), if applicable, shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the effective time of the Merger, (b)
the seventh calendar day following the date of termination of the Merger
Agreement, other than a termination in connection with an International
Termination Event, (c) the date of termination of the Merger Agreement in
connection with an International Termination Event, and (d) by the written
mutual consent of the parties hereto. Notwithstanding the foregoing, in the
event any Option shall have been exercised in accordance with Article II, but
the Closing shall not have occurred, the provisions of Articles I and III and
Section 2.03 shall survive until the Closing. Nothing in this Section 6.01 shall
relieve any party of liability for any breach of this Agreement.
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ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.02. Further Assurances. The Stockholder and
International will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 7.03. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were breached, and in the event of such breach the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
SECTION 7.04. Entire Agreement. This Agreement constitutes the
entire agreement between International and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between International and the Stockholder with respect to
the subject matter hereof.
SECTION 7.05. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party to this Agreement may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 7.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any Federal or state court sitting in the
Borough of Manhattan, The City of New York.
SECTION 7.07. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial
7
advisors and accountants (collectively, "Professionals") (to the extent the
Stockholder retains its own Professionals) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Merger shall have
occurred.
SECTION 7.08. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery or by telecopy to the respective parties at the following addresses or
telecopy numbers (or at such other address for a party as shall be specified in
a notice given in accordance with this Section 7.08):
(a) if to the Stockholder:
Xxxxxxxx Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx
00000
(b) if to International:
Hub International Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxx Xxxxx, Vice President
SECTION 7.09. Currency. All amounts in this Agreement are
stated and shall be paid in United States dollars.
SECTION 7.10. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 7.11. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
Stockholder and International (which consent may be granted or withheld in the
sole discretion of the Stockholder or International); provided, however, that
International may assign this Agreement to an affiliate of International without
the consent of the Stockholder, in which event International will remain jointly
and severally liable with such affiliate for all of such affiliate's obligations
hereunder and such affiliate of International shall agree to be bound by the
provisions of this Agreement.
SECTION 7.12. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person any legal or
8
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 7.13. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 7.14. Transfer of Shares. The Stockholder is hereby
permitted to transfer or sell any or all of such Stockholder's Shares, if and so
long as, (a) International is notified of such transfer or sale at least 2
Business Days (as defined in the Merger Agreement) prior to such transfer or
sale, (b) at or prior to such transfer or sale, the transferee executes a Stock
Option and Voting Agreement identical to this Agreement which shall apply to all
of the Common Stock being transferred to such transferee by the Stockholder and
(c) at or prior to the time of transfer or sale, the Stockholder shall enter
into an amended Stock Option and Voting Agreement with respect to the Shares
retained by it, him or her which shall be identical to this Agreement except
that the number of Shares in the second recital shall reflect that number of
Shares then owned by the Stockholder.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
XXXXXXXX XXXXXXX
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxx
HUB INTERNATIONAL LIMITED
By: /s/ W. Xxxx Xxxxx
-----------------------------------
Name: W. Xxxx Xxxxx
Title: Vice President &
General Counsel
10
STOCK OPTION AND VOTING AGREEMENT
---------------------------------
Between
XXX X. XXXXXXXX
and
HUB INTERNATIONAL LIMITED
Dated as of January 19, 2001
----------------------------
STOCK OPTION AND VOTING AGREEMENT dated as of January 19,
2001, between Xxx X. Xxxxxxxx (the "Stockholder"), a stockholder of Xxxx Group
Inc., a Delaware corporation (the "Company"), and Hub International Limited, an
Ontario corporation ("International").
WHEREAS, the Agreement and Plan of Merger dated the date
hereof between the Company, International and 416 Acquisition Inc., a Delaware
Corporation and a wholly-owned subsidiary of International ("Merger Sub"), as
amended from time to time (the "Merger Agreement"), provides, among other
things, that the Merger Sub will merge with and into the Company as contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the record
and beneficial owner of 485,002 shares of Common Stock, par value U.S.$.01 per
share, of the Company (the "Common Shares") (the Stockholder's shares of Common
Stock together with any Common Stock acquired after the date hereof, including
upon the exercise of warrants or options, the conversion of convertible
securities or otherwise, are referred to as the "Shares");
WHEREAS, as a condition to the willingness of International to
enter into the Merger Agreement, International has requested that the
Stockholder agree, and in order to induce International to enter into the Merger
Agreement, the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, as of the date hereof, International and certain
other holders of Common Stock are entering into stock option and voting
agreements whereby, among other things, such stockholders are granting options
to International (the "Remaining Options") for the Common Stock held by such
stockholders.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
----------------
SECTION 1.01. Voting Agreement. The Stockholder, from and
after the date hereof and until this Agreement shall have been terminated in
accordance with Article VI hereof, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, will vote (or cause to be voted) the Shares (i) in favor of the
approval and adoption of the Merger Agreement, the Merger and all of the
transactions contemplated by the Merger Agreement, and this Agreement, (ii)
against any merger, consolidation, sale of assets, recapitalization or other
business combination involving the Company (other than the Merger) or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which would result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled, and (iii)
in favor of any
other proposal as may be necessary to consummate the Merger if such proposal is
neutral or advantageous to the Stockholder and such proposal is reasonably
feasible and is not contrary to applicable laws and regulations. The Stockholder
shall not enter into any agreement or commitment with any person or entity to
vote or give instructions in any manner inconsistent with this Section 1.01.
ARTICLE II
THE OPTION
----------
SECTION 2.01. Grant of Option. The Stockholder hereby grants
to International an irrevocable option ("the Option") to purchase the Shares in
the manner and for the Purchase Price (as defined below) set forth below in this
Article.
SECTION 2.02. Exercise of Option. (a) The Option may be
exercised by International as a whole together with the Remaining Options but
not in part, at any time prior to 5:00 p.m. (Toronto time) on the seventh
calendar day following the termination of the Merger Agreement, provided, that
International may not exercise the Option if the Company has terminated the
Merger Agreement after notice to International of a breach by International of
the Merger Agreement (an "International Termination Event").
(b) If prior to the termination of the Merger Agreement,
there shall have been made an announcement by a third party or notice by the
Company to International of a Superior Proposal, as that term is defined in
Section 9.04(m) of the Merger Agreement, and the Merger Agreement is terminated,
International may elect to (i) exercise the Option pursuant to paragraph (a) of
this Section 2.02, or (ii) within seven calendar days after such termination
inform the Stockholder in writing that it will not exercise the Option but will
participate in the proceeds received by the Stockholder from any consummation of
any sale of the Stockholder's Shares (pursuant to such Superior Proposal or
otherwise) that closes within one year after termination of the Merger Agreement
by receiving from the Stockholder the Participation Amount as defined in this
paragraph (b). The Stockholder will promptly upon receipt by it pay to
International 50% of the proceeds (net of expenses and transfer taxes) it
receives from the closing of a sale of the Stockholder's Shares in excess of
U.S.$14 per Share (the "Participation Amount") provided however for purposes of
this Article II only "Shares" shall be defined as the Stockholder's shares of
Common Stock owned as of the date hereof, which shall include shares of Common
Stock issued from the date hereof upon the exercise options or warrants, the
conversion of convertible securities or otherwise, but shall not include any
Common Stock acquired by the Stockholder by purchases in the open market from
the date hereof.
(c) If International decides to exercise the Option,
International shall send a written notice to the Stockholder of its intention to
exercise the Option, specifying the place, the time and the date (the "Closing
Date") of the closing (the "Closing") of the purchase. The Closing Date shall
occur on the fifth business day after the date on which such notice is
delivered.
(d) At the Closing, the Stockholder shall deliver to
International (or its designee) all of the Shares by delivery of a certificate
or certificates evidencing the Shares duly
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endorsed to International or accompanied by stock powers duly executed in favor
of International, with all necessary stock transfer stamps and signature
guarantees affixed.
SECTION 2.03. Purchase Price. (a) The purchase price for each
Share shall be U.S.$14 payable, as adjusted in accordance with the provisions of
Section 2.08 of the Merger Agreement, if applicable, as follows: (A) net amount
of U.S.$9.3334 in cash, without interest thereon, (the "Cash Component") and (B)
U.S.$4.6666 principal amount of a Parent Debenture (as defined in the Merger
Agreement) (the "Debenture Component" and together with the Cash Component, the
"Purchase Price"). If pursuant to Section 2.04 of the Merger Agreement, Parent
elects to increase the Cash Component and decrease the Debenture Component then
the Parent shall make the same adjustment to the Purchase Price.
(b) In the event that subsequent to International
exercising its Option, any acquisition (including by way of amalgamation or
merger) of the Company's Common Stock (in whole or in part), or all or any
substantial portion of the assets or business of the Company, in any case by
International or any of its affiliates, is consummated, International shall
distribute to the Stockholder 50% of the consideration per Share in excess of
U.S.$14 that would have been paid to the Stockholder if the Option were not
exercised. Such consideration shall be paid by International at the same time
and in the same manner as such consideration is paid to the stockholders of the
Company.
(c) If International shall have exercised its Option
pursuant to Section 2.02(b) and shall have disposed of the Company's Common
Stock acquired pursuant to such Option as a result of a Superior Proposal,
International shall distribute to the Stockholder securities or cash with a
value per Share equal to 50% of the cash or securities (net of expenses and
transfer taxes) in excess of U.S.$14 per Share acquired under such Superior
Proposal ("Excess Proceeds"). If the consideration received by International in
the Superior Proposal includes securities, the portion of the Excess Proceeds
that is paid over to the Stockholder will be satisfied with securities and cash
in the same proportion as the portion of securities and cash received by
International that constitutes Excess Proceeds. For purposes of the foregoing
only, the value of any such securities, if not specifically stated in the
agreement or other documentation entered into in connection with the Superior
Proposal by the parties thereto, shall, except as may be agreed between the
Stockholder and International, be deemed to be the fair value determined by an
independent investment banker of recognized standing appointed by International.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
-------------------------------------------------
The Stockholder hereby represents and warrants to
International as follows:
SECTION 3.01. Valid Organization and Execution. (a) In the
case of a Stockholder that is not a natural person: (i) the Stockholder is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization and has all necessary corporate or partnership
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(ii)
3
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action (corporate or partnership) on the part of the Stockholder; and (iii) this
Agreement has been duly executed and delivered by or on behalf of the
Stockholder. In the case of a Stockholder that is a natural person: (i) the
Stockholder has full legal right, power and authority to enter into this
Agreement and to perform such Stockholder's obligations hereunder without the
need for the consent of any other person or entity; and (ii) this Agreement has
been duly authorized, executed and delivered by such Stockholder.
SECTION 3.02. No Conflict. The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder (i) shall not, result in the creation of a lien or encumbrance
on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Stockholder is a party or by which the Stockholder or the Shares is bound or
affected, (ii) to the knowledge of the Stockholder, does not contravene or
violate any laws, rules or regulations applicable to it, him or her; (iii) in
the case of a Stockholder who is not a natural person, conflict with or violate
the Certificate of Incorporation or By-Laws or similar organizational document
of the Stockholder, and (iv) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority,
domestic or foreign, except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, or the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Xxxxxx Act").
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record and beneficial owner of the number of shares of Common
Stock set forth in the second recital. Such Shares are all the securities of the
Company owned, either of record or beneficially, by the Stockholder. The Shares
are owned by the Stockholder free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever except under applicable securities laws. The Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. At the Closing, such Stockholder will deliver good
and valid title to the Shares free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement or applicable securities laws.
SECTION 3.04. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Stockholder.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
-----------------------------------------------
International hereby represents and warrants to the
Stockholder as follows:
SECTION 4.01. Due Organization, Etc. International is a
corporation duly organized and validly existing under the laws of Ontario.
International has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by International have been duly authorized by
all necessary corporate action on the part of International. This Agreement has
been duly executed and delivered by International.
SECTION 4.02. No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by International do not, and the
performance of this Agreement by International will not, (i) conflict with or
violate the Articles of Incorporation or By-laws of International; or any law,
rule or regulation to which International is subject and (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental authority, domestic or foreign, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, or the
Xxxx-Xxxxx Xxxxxx Act.
SECTION 4.03. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of International.
ARTICLE V
COVENANTS OF THE STOCKHOLDER
----------------------------
SECTION 5.01. No Disposition or Encumbrance of Shares. The
Stockholder, except as contemplated by this Agreement, will not (i) sell,
transfer, tender, assign, contribute to the capital of any entity, hypothecate
or otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, any of the Shares (or agree or consent
to, or offer to do, any of the foregoing), (ii) take any action that would have
the effect of preventing or disabling the Stockholder from performing its
obligations hereunder, or (iii) directly or indirectly, initiate, solicit or
encourage any person to take actions that could reasonably be expected to lead
to the occurrence of any of the foregoing.
SECTION 5.02. No Solicitation of Transactions. The
Stockholder, between the date of this Agreement and the date of termination of
this Agreement, will not and will not authorize or, to the extent it is within
the Stockholder's power, permit any of the Stockholder's related or subsidiary
companies and trusts, partners, management, shareholders or trustees, or any of
such Stockholder's related or subsidiary companies and trusts, and financial
advisers, investment dealers or others acting as agent or otherwise for such
Stockholder or any of the foregoing, except in dealing with International and
Merger Sub or otherwise in furtherance of the
5
Merger, to provide information or access for review, enter into any agreement,
have any discussions, negotiations or correspondence or take any other action
related to or with a view to soliciting, encouraging, assisting in or
cooperating with any offer or proposal for, or which would have an effect
comparable to any acquisition (including by way of amalgamation or a merger) of
Common Stock (in whole or in part) or any material portion of the Company's or
any subsidiary of the Company's assets or business, any financing of any
acquisition thereof or financing of the Company or any subsidiary of the Company
or any material change in the management or operation (including by way of
material divestiture, partnership or joint venture) of the business of the
Company or any subsidiary of the Company. The Stockholder immediately shall
cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any persons conducted heretofore with
respect to any of the foregoing; provided that in the case of a Stockholder who
is a member of the Board of Directors of the Company (a "Director"), nothing in
this Section 5.02 shall be construed as interfering with or limiting such
Director's ability to comply with Section 6.04 of the Merger Agreement, as
required. Such Stockholder by signing this Agreement hereby acknowledges that
any actions taken by such Stockholder or any other person pursuant to Section
6.04(b) of the Merger Agreement shall have no effect on his or her obligations
or his or her full performance hereunder or on the rights of International
hereunder.
SECTION 5.03. Regulatory and Other Authorizations; Notices and
Consents. The Stockholder agrees to use all reasonable efforts to cooperate with
International in supporting and defending this Agreement against any third party
and in obtaining all authorizations, consents, orders and approvals of all
governmental authorities and officials that may be or become necessary for the
execution and delivery of, and the performance of its, his or her obligations
pursuant to, this Agreement. Each party hereto agrees to make an appropriate
filing, if necessary, pursuant to the Xxxx-Xxxxx Xxxxxx Act.
ARTICLE VI
TERMINATION
-----------
SECTION 6.01. Termination. This Agreement, except for Section
2.02(b), if applicable, shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the effective time of the Merger, (b)
the seventh calendar day following the date of termination of the Merger
Agreement, other than a termination in connection with an International
Termination Event, (c) the date of termination of the Merger Agreement in
connection with an International Termination Event, and (d) by the written
mutual consent of the parties hereto. Notwithstanding the foregoing, in the
event any Option shall have been exercised in accordance with Article II, but
the Closing shall not have occurred, the provisions of Articles I and III and
Section 2.03 shall survive until the Closing. Nothing in this Section 6.01 shall
relieve any party of liability for any breach of this Agreement.
6
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.02. Further Assurances. The Stockholder and
International will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 7.03. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were breached, and in the event of such breach the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
SECTION 7.04. Entire Agreement. This Agreement constitutes the
entire agreement between International and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between International and the Stockholder with respect to
the subject matter hereof.
SECTION 7.05. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party to this Agreement may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 7.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any Federal or state court sitting in the
Borough of Manhattan, The City of New York.
SECTION 7.07. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial
7
advisors and accountants (collectively, "Professionals") (to the extent the
Stockholder retains its own Professionals) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Merger shall have
occurred.
SECTION 7.08. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery or by telecopy to the respective parties at the following addresses or
telecopy numbers (or at such other address for a party as shall be specified in
a notice given in accordance with this Section 7.08):
(a) if to the Stockholder:
Xxx X. Xxxxxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx
00000
Telecopy: (000) 000-0000
(b) if to International:
Hub International Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxx Xxxxx, Vice President
SECTION 7.09. Currency. All amounts in this Agreement are
stated and shall be paid in United States dollars.
SECTION 7.10. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 7.11. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
Stockholder and International (which consent may be granted or withheld in the
sole discretion of the Stockholder or International); provided, however, that
International may assign this Agreement to an affiliate of International without
the consent of the Stockholder, in which event International will remain jointly
and severally liable with such affiliate for all of such affiliate's obligations
hereunder and such affiliate of International shall agree to be bound by the
provisions of this Agreement.
SECTION 7.12. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing
8
herein, express or implied, is intended to or shall confer upon any other person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.
SECTION 7.13. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 7.14. Transfer of Shares. The Stockholder is hereby
permitted to transfer or sell any or all of such Stockholder's Shares, if and so
long as, (a) International is notified of such transfer or sale at least 2
Business Days (as defined in the Merger Agreement) prior to such transfer or
sale, (b) at or prior to such transfer or sale, the transferee executes a Stock
Option and Voting Agreement identical to this Agreement which shall apply to all
of the Common Stock being transferred to such transferee by the Stockholder and
(c) at or prior to the time of transfer or sale, the Stockholder shall enter
into an amended Stock Option and Voting Agreement with respect to the Shares
retained by it, him or her which shall be identical to this Agreement except
that the number of Shares in the second recital shall reflect that number of
Shares then owned by the Stockholder.
9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
XXX X. XXXXXXXX
By: /s/ Xxx X. Xxxxxxxx
-----------------------------------
Name: Xxx X. Xxxxxxxx
HUB INTERNATIONAL LIMITED
By: /s/ W. Xxxx Xxxxx
-----------------------------------
Name: W. Xxxx Xxxxx
Title: Vice President and
General Counsel
10
STOCK OPTION AND VOTING AGREEMENT
---------------------------------
Between
ZS PUBCO I, LP
and
HUB INTERNATIONAL LIMITED
Dated as of January 19, 2001
----------------------------
STOCK OPTION AND VOTING AGREEMENT dated as of January 19,
2001, between ZS Pubco I, LP (the "Stockholder"), a stockholder of Xxxx Group
Inc., a Delaware corporation (the "Company"), and Hub International Limited, an
Ontario corporation ("International").
WHEREAS, the Agreement and Plan of Merger dated the date
hereof between the Company, International and 416 Acquisition Inc., a Delaware
Corporation and a wholly-owned subsidiary of International ("Merger Sub"), as
amended from time to time (the "Merger Agreement"), provides, among other
things, that the Merger Sub will merge with and into the Company as contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the record
and beneficial owner of 1,129,241 shares of Common Stock, par value U.S.$.01 per
share, of the Company (the "Common Shares") (the Stockholder's shares of Common
Stock together with any Common Stock acquired after the date hereof, including
upon the exercise of warrants or options, the conversion of convertible
securities or otherwise, are referred to as the "Shares");
WHEREAS, as a condition to the willingness of International to
enter into the Merger Agreement, International has requested that the
Stockholder agree, and in order to induce International to enter into the Merger
Agreement, the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, as of the date hereof, International and certain
other holders of Common Stock are entering into stock option and voting
agreements whereby, among other things, such stockholders are granting options
to International (the "Remaining Options") for the Common Stock held by such
stockholders.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
----------------
SECTION 1.01. Voting Agreement. The Stockholder, from and
after the date hereof and until this Agreement shall have been terminated in
accordance with Article VI hereof, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, will vote (or cause to be voted) the Shares (i) in favor of the
approval and adoption of the Merger Agreement, the Merger and all of the
transactions contemplated by the Merger Agreement, and this Agreement, (ii)
against any merger, consolidation, sale of assets, recapitalization or other
business combination involving the Company (other than the Merger) or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which would result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled, and (iii)
in favor of any
other proposal as may be necessary to consummate the Merger if such proposal is
neutral or advantageous to the Stockholder and such proposal is reasonably
feasible and is not contrary to applicable laws and regulations. The Stockholder
shall not enter into any agreement or commitment with any person or entity to
vote or give instructions in any manner inconsistent with this Section 1.01.
ARTICLE II
THE OPTION
----------
SECTION 2.01. Grant of Option. The Stockholder hereby grants
to International an irrevocable option ("the Option") to purchase the Shares in
the manner and for the Purchase Price (as defined below) set forth below in this
Article.
SECTION 2.02. Exercise of Option. (a) The Option may be
exercised by International as a whole together with the Remaining Options but
not in part, at any time prior to 5:00 p.m. (Toronto time) on the seventh
calendar day following the termination of the Merger Agreement, provided, that
International may not exercise the Option if the Company has terminated the
Merger Agreement after notice to International of a breach by International of
the Merger Agreement (an "International Termination Event").
(b) If prior to the termination of the Merger Agreement,
there shall have been made an announcement by a third party or notice by the
Company to International of a Superior Proposal, as that term is defined in
Section 9.04(m) of the Merger Agreement, and the Merger Agreement is terminated,
International may elect to (i) exercise the Option pursuant to paragraph (a) of
this Section 2.02, or (ii) within seven calendar days after such termination
inform the Stockholder in writing that it will not exercise the Option but will
participate in the proceeds received by the Stockholder from any consummation of
any sale of the Stockholder's Shares (pursuant to such Superior Proposal or
otherwise) that closes within one year after termination of the Merger Agreement
by receiving from the Stockholder the Participation Amount as defined in this
paragraph (b). The Stockholder will promptly upon receipt by it pay to
International 50% of the proceeds (net of expenses and transfer taxes) it
receives from the closing of a sale of the Stockholder's Shares in excess of
U.S.$14 per Share (the "Participation Amount") provided however for purposes of
this Article II --------------------- only "Shares" shall be defined as the
Stockholder's shares of Common Stock owned as of the date hereof, which shall
include shares of Common Stock issued from the date hereof upon the exercise
options or warrants, the conversion of convertible securities or otherwise, but
shall not include any Common Stock acquired by the Stockholder by purchases in
the open market from the date hereof.
(c) If International decides to exercise the Option,
International shall send a written notice to the Stockholder of its intention to
exercise the Option, specifying the place, the time and the date (the "Closing
Date") of the closing (the "Closing") of the purchase. The Closing Date shall
occur on the fifth business day after the date on which such notice is
delivered.
(d) At the Closing, the Stockholder shall deliver to
International (or its designee) all of the Shares by delivery of a certificate
or certificates evidencing the Shares duly
2
endorsed to International or accompanied by stock powers duly executed in favor
of International, with all necessary stock transfer stamps and signature
guarantees affixed.
SECTION 2.03. Purchase Price. (a) The purchase price for each
Share shall be U.S.$14 payable, as adjusted in accordance with the provisions of
Section 2.08 of the Merger Agreement, if applicable, as follows: (A) net amount
of U.S.$9.3334 in cash, without interest thereon, (the "Cash Component") and (B)
U.S.$4.6666 principal amount of a Parent Debenture (as defined in the Merger
Agreement) (the "Debenture Component" and together with the Cash Component, the
"Purchase Price"). If pursuant to Section 2.04 of the Merger Agreement, Parent
elects to increase the Cash Component and decrease the Debenture Component then
the Parent shall make the same adjustment to the Purchase Price.
(b) In the event that subsequent to International
exercising its Option, any acquisition (including by way of amalgamation or
merger) of the Company's Common Stock (in whole or in part), or all or any
substantial portion of the assets or business of the Company, in any case by
International or any of its affiliates, is consummated, International shall
distribute to the Stockholder 50% of the consideration per Share in excess of
U.S.$14 that would have been paid to the Stockholder if the Option were not
exercised. Such consideration shall be paid by International at the same time
and in the same manner as such consideration is paid to the stockholders of the
Company.
(c) If International shall have exercised its Option
pursuant to Section 2.02(b) and shall have disposed of the Company's Common
Stock acquired pursuant to such Option as a result of a Superior Proposal,
International shall distribute to the Stockholder securities or cash with a
value per Share equal to 50% of the cash or securities (net of expenses and
transfer taxes) in excess of U.S.$14 per Share acquired under such Superior
Proposal ("Excess Proceeds"). If the consideration received by International in
the Superior Proposal includes securities, the portion of the Excess Proceeds
that is paid over to the Stockholder will be satisfied with securities and cash
in the same proportion as the portion of securities and cash received by
International that constitutes Excess Proceeds. For purposes of the foregoing
only, the value of any such securities, if not specifically stated in the
agreement or other documentation entered into in connection with the Superior
Proposal by the parties thereto, shall, except as may be agreed between the
Stockholder and International, be deemed to be the fair value determined by an
independent investment banker of recognized standing appointed by International.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
-------------------------------------------------
The Stockholder hereby represents and warrants to
International as follows:
SECTION 3.01. Valid Organization and Execution. (a) In the
case of a Stockholder that is not a natural person: (i) the Stockholder is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization and has all necessary corporate or partnership
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(ii)
3
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action (corporate or partnership) on the part of the Stockholder; and (iii) this
Agreement has been duly executed and delivered by or on behalf of the
Stockholder. In the case of a Stockholder that is a natural person: (i) the
Stockholder has full legal right, power and authority to enter into this
Agreement and to perform such Stockholder's obligations hereunder without the
need for the consent of any other person or entity; and (ii) this Agreement has
been duly authorized, executed and delivered by such Stockholder.
SECTION 3.02. No Conflict. The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder (i) shall not, result in the creation of a lien or encumbrance
on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Stockholder is a party or by which the Stockholder or the Shares is bound or
affected, (ii) to the knowledge of the Stockholder, does not contravene or
violate any laws, rules or regulations applicable to it, him or her; (iii) in
the case of a Stockholder who is not a natural person, conflict with or violate
the Certificate of Incorporation or By-Laws or similar organizational document
of the Stockholder, and (iv) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority,
domestic or foreign, except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, or the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Xxxxxx Act").
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record and beneficial owner of the number of shares of Common
Stock set forth in the second recital. Such Shares are all the securities of the
Company owned, either of record or beneficially, by the Stockholder. The Shares
are owned by the Stockholder free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever except under applicable securities laws. The Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. At the Closing, such Stockholder will deliver good
and valid title to the Shares free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement or applicable securities laws.
SECTION 3.04. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Stockholder.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
-----------------------------------------------
International hereby represents and warrants to the
Stockholder as follows:
SECTION 4.01. Due Organization, Etc. International is a
corporation duly organized and validly existing under the laws of Ontario.
International has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by International have been duly authorized by
all necessary corporate action on the part of International. This Agreement has
been duly executed and delivered by International.
SECTION 4.02. No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by International do not, and the
performance of this Agreement by International will not, (i) conflict with or
violate the Articles of Incorporation or By-laws of International; or any law,
rule or regulation to which International is subject and (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental authority, domestic or foreign, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, or the
Xxxx-Xxxxx Xxxxxx Act.
SECTION 4.03. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of International.
ARTICLE V
COVENANTS OF THE STOCKHOLDER
----------------------------
SECTION 5.01. No Disposition or Encumbrance of Shares. The
Stockholder, except as contemplated by this Agreement, will not (i) sell,
transfer, tender, assign, contribute to the capital of any entity, hypothecate
or otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, any of the Shares (or agree or consent
to, or offer to do, any of the foregoing), (ii) take any action that would have
the effect of preventing or disabling the Stockholder from performing its
obligations hereunder, or (iii) directly or indirectly, initiate, solicit or
encourage any person to take actions that could reasonably be expected to lead
to the occurrence of any of the foregoing.
SECTION 5.02. No Solicitation of Transactions. The
Stockholder, between the date of this Agreement and the date of termination of
this Agreement, will not and will not authorize or, to the extent it is within
the Stockholder's power, permit any of the Stockholder's related or subsidiary
companies and trusts, partners, management, shareholders or trustees, or any of
such Stockholder's related or subsidiary companies and trusts, and financial
advisers, investment dealers or others acting as agent or otherwise for such
Stockholder or any of the foregoing, except in dealing with International and
Merger Sub or otherwise in furtherance of the
5
Merger, to provide information or access for review, enter into any agreement,
have any discussions, negotiations or correspondence or take any other action
related to or with a view to soliciting, encouraging, assisting in or
cooperating with any offer or proposal for, or which would have an effect
comparable to any acquisition (including by way of amalgamation or a merger) of
Common Stock (in whole or in part) or any material portion of the Company's or
any subsidiary of the Company's assets or business, any financing of any
acquisition thereof or financing of the Company or any subsidiary of the Company
or any material change in the management or operation (including by way of
material divestiture, partnership or joint venture) of the business of the
Company or any subsidiary of the Company. The Stockholder immediately shall
cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any persons conducted heretofore with
respect to any of the foregoing; provided that in the case of a Stockholder who
is a member of the Board of Directors of the Company (a "Director"), nothing in
this Section 5.02 shall be construed as interfering with or limiting such
Director's ability to comply with Section 6.04 of the Merger Agreement, as
required. Such Stockholder by signing this Agreement hereby acknowledges that
any actions taken by such Stockholder or any other person pursuant to Section
6.04(b) of the Merger Agreement shall have no effect on his or her obligations
or his or her full performance hereunder or on the rights of International
hereunder.
SECTION 5.03. Regulatory and Other Authorizations; Notices and
Consents. The Stockholder agrees to use all reasonable efforts to cooperate with
International in supporting and defending this Agreement against any third party
and in obtaining all authorizations, consents, orders and approvals of all
governmental authorities and officials that may be or become necessary for the
execution and delivery of, and the performance of its, his or her obligations
pursuant to, this Agreement. Each party hereto agrees to make an appropriate
filing, if necessary, pursuant to the Xxxx-Xxxxx Xxxxxx Act.
ARTICLE VI
TERMINATION
-----------
SECTION 6.01. Termination. This Agreement, except for Section
2.02(b), if applicable, shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the effective time of the Merger, (b)
the seventh calendar day following the date of termination of the Merger
Agreement, other than a termination in connection with an International
Termination Event, (c) the date of termination of the Merger Agreement in
connection with an International Termination Event, and (d) by the written
mutual consent of the parties hereto. Notwithstanding the foregoing, in the
event any Option shall have been exercised in accordance with Article II, but
the Closing shall not have occurred, the provisions of Articles I and III and
Section 2.03 shall survive until the Closing. Nothing in this Section 6.01 shall
relieve any party of liability for any breach of this Agreement.
6
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.02. Further Assurances. The Stockholder and
International will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 7.03. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were breached, and in the event of such breach the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
SECTION 7.04. Entire Agreement. This Agreement constitutes the
entire agreement between International and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between International and the Stockholder with respect to
the subject matter hereof.
SECTION 7.05. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party to this Agreement may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 7.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any Federal or state court sitting in the
Borough of Manhattan, The City of New York.
SECTION 7.07. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial
7
advisors and accountants (collectively, "Professionals") (to the extent the
Stockholder retains its own Professionals) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Merger shall have
occurred.
SECTION 7.08. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery or by telecopy to the respective parties at the following addresses or
telecopy numbers (or at such other address for a party as shall be specified in
a notice given in accordance with this Section 7.08):
(a) if to the Stockholder:
ZS Pubco I, LP
000 X. 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx
00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxx
(b) if to International:
Hub International Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxx Xxxxx, Vice President
SECTION 7.09. Currency. All amounts in this Agreement are
stated and shall be paid in United States dollars.
SECTION 7.10. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 7.11. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
Stockholder and International (which consent may be granted or withheld in the
sole discretion of the Stockholder or International); provided, however, that
International may assign this Agreement to an affiliate of International without
the consent of the Stockholder, in which event International will remain jointly
and severally liable with such affiliate for all of such affiliate's obligations
hereunder and such affiliate of International shall agree to be bound by the
provisions of this Agreement.
8
SECTION 7.12. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 7.13. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 7.14. Transfer of Shares. The Stockholder is hereby
permitted to transfer or sell any or all of such Stockholder's Shares, if and so
long as, (a) International is notified of such transfer or sale at least 2
Business Days (as defined in the Merger Agreement) prior to such transfer or
sale, (b) at or prior to such transfer or sale, the transferee executes a Stock
Option and Voting Agreement identical to this Agreement which shall apply to all
of the Common Stock being transferred to such transferee by the Stockholder and
(c) at or prior to the time of transfer or sale, the Stockholder shall enter
into an amended Stock Option and Voting Agreement with respect to the Shares
retained by it, him or her which shall be identical to this Agreement except
that the number of Shares in the second recital shall reflect that number of
Shares then owned by the Stockholder.
9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
ZS PUBCO I, LP
By: ZS PUBCO I, LLC, general partner
By: /s/ Xxxxxx Xxxxx
-----------------------------------
An officer thereof
HUB INTERNATIONAL LIMITED
By: /s/ W. Xxxx Xxxxx
-----------------------------------
Name: W. Xxxx Xxxxx
Title: Vice President and
General Counsel
10
STOCK OPTION AND VOTING AGREEMENT
Between
WOODBOURNE PARTNERS, LP
and
HUB INTERNATIONAL LIMITED
Dated as of January 19, 2001
STOCK OPTION AND VOTING AGREEMENT dated as of January 19,
2001, between Woodbourne Partners, LP (the "Stockholder"), a stockholder of Xxxx
Group Inc., a Delaware corporation (the "Company"), and Hub International
Limited, an Ontario corporation ("International").
WHEREAS, the Agreement and Plan of Merger dated the date
hereof between the Company, International and 416 Acquisition Inc., a Delaware
Corporation and a wholly-owned subsidiary of International ("Merger Sub"), as
amended from time to time (the "Merger Agreement"), provides, among other
things, that the Merger Sub will merge with and into the Company as contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the record
and beneficial owner of 797,803 shares of Common Stock, par value U.S.$.01 per
share, of the Company (the "Common Shares") (the Stockholder's shares of Common
Stock together with any Common Stock acquired after the date hereof, including
upon the exercise of warrants or options, the conversion of convertible
securities or otherwise, are referred to as the "Shares");
WHEREAS, as a condition to the willingness of International to
enter into the Merger Agreement, International has requested that the
Stockholder agree, and in order to induce International to enter into the Merger
Agreement, the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, as of the date hereof, International and certain
other holders of Common Stock are entering into stock option and voting
agreements whereby, among other things, such stockholders are granting options
to International (the "Remaining Options") for the Common Stock held by such
stockholders.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
----------------
SECTION 1.01. Voting Agreement. The Stockholder, from and
after the date hereof and until this Agreement shall have been terminated in
accordance with Article VI hereof, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, will vote (or cause to be voted) the Shares (i) in favor of the
approval and adoption of the Merger Agreement, the Merger and all of the
transactions contemplated by the Merger Agreement, and this Agreement, (ii)
against any merger, consolidation, sale of assets, recapitalization or other
business combination involving the Company (other than the Merger) or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which would result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled, and (iii)
in favor of any
other proposal as may be necessary to consummate the Merger if such proposal is
neutral or advantageous to the Stockholder and such proposal is reasonably
feasible and is not contrary to applicable laws and regulations. The Stockholder
shall not enter into any agreement or commitment with any person or entity to
vote or give instructions in any manner inconsistent with this Section 1.01.
ARTICLE II
THE OPTION
----------
SECTION 2.01. Grant of Option. The Stockholder hereby grants
to International an irrevocable option ("the Option") to purchase the Shares in
the manner and for the Purchase Price (as defined below) set forth below in this
Article.
SECTION 2.02. Exercise of Option. (a) The Option may be
exercised by International as a whole together with the Remaining Options but
not in part, at any time prior to 5:00 p.m. (Toronto time) on the seventh
calendar day following the termination of the Merger Agreement, provided, that
International may not exercise the Option if the Company has terminated the
Merger Agreement after notice to International of a breach by International of
the Merger Agreement (an "International Termination Event").
(b) If prior to the termination of the Merger Agreement,
there shall have been made an announcement by a third party or notice by the
Company to International of a Superior Proposal, as that term is defined in
Section 9.04(m) of the Merger Agreement, and the Merger Agreement is terminated,
International may elect to (i) exercise the Option pursuant to paragraph (a) of
this Section 2.02, or (ii) within seven calendar days after such termination
inform the Stockholder in writing that it will not exercise the Option but will
participate in the proceeds received by the Stockholder from any consummation of
any sale of the Stockholder's Shares (pursuant to such Superior Proposal or
otherwise) that closes within one year after termination of the Merger Agreement
by receiving from the Stockholder the Participation Amount as defined in this
paragraph (b). The Stockholder will promptly upon receipt by it pay to
International 50% of the proceeds (net of expenses and transfer taxes) it
receives from the closing of a sale of the Stockholder's Shares in excess of
U.S.$14 per Share (the "Participation Amount") provided however for purposes of
this Article II only "Shares" shall be defined as the Stockholder's shares of
Common Stock owned as of the date hereof, which shall include shares of Common
Stock issued from the date hereof upon the exercise options or warrants, the
conversion of convertible securities or otherwise, but shall not include any
Common Stock acquired by the Stockholder by purchases in the open market from
the date hereof.
(c) If International decides to exercise the Option,
International shall send a written notice to the Stockholder of its intention to
exercise the Option, specifying the place, the time and the date (the "Closing
Date") of the closing (the "Closing") of the purchase. The Closing Date shall
occur on the fifth business day after the date on which such notice is
delivered.
(d) At the Closing, the Stockholder shall deliver to
International (or its designee) all of the Shares by delivery of a certificate
or certificates evidencing the Shares duly
2
endorsed to International or accompanied by stock powers duly executed in favor
of International, with all necessary stock transfer stamps and signature
guarantees affixed.
SECTION 2.03. Purchase Price. (a) The purchase price for each
Share shall be U.S.$14 payable, as adjusted in accordance with the provisions of
Section 2.08 of the Merger Agreement, if applicable, as follows: (A) net amount
of U.S.$9.3334 in cash, without interest thereon, (the "Cash Component") and (B)
U.S.$4.6666 principal amount of a Parent Debenture (as defined in the Merger
Agreement) (the "Debenture Component" and together with the Cash Component, the
"Purchase Price"). If pursuant to Section 2.04 of the Merger Agreement, Parent
elects to increase the Cash Component and decrease the Debenture Component then
the Parent shall make the same adjustment to the Purchase Price.
(b) In the event that subsequent to International
exercising its Option, any acquisition (including by way of amalgamation or
merger) of the Company's Common Stock (in whole or in part), or all or any
substantial portion of the assets or business of the Company, in any case by
International or any of its affiliates, is consummated, International shall
distribute to the Stockholder 50% of the consideration per Share in excess of
U.S.$14 that would have been paid to the Stockholder if the Option were not
exercised. Such consideration shall be paid by International at the same time
and in the same manner as such consideration is paid to the stockholders of the
Company.
(c) If International shall have exercised its Option
pursuant to Section 2.02(b) and shall have disposed of the Company's Common
Stock acquired pursuant to such Option as a result of a Superior Proposal,
International shall distribute to the Stockholder securities or cash with a
value per Share equal to 50% of the cash or securities (net of expenses and
transfer taxes) in excess of U.S.$14 per Share acquired under such Superior
Proposal ("Excess Proceeds"). If the consideration received by International in
the Superior Proposal includes securities, the portion of the Excess Proceeds
that is paid over to the Stockholder will be satisfied with securities and cash
in the same proportion as the portion of securities and cash received by
International that constitutes Excess Proceeds. For purposes of the foregoing
only, the value of any such securities, if not specifically stated in the
agreement or other documentation entered into in connection with the Superior
Proposal by the parties thereto, shall, except as may be agreed between the
Stockholder and International, be deemed to be the fair value determined by an
independent investment banker of recognized standing appointed by International.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
-------------------------------------------------
The Stockholder hereby represents and warrants to
International as follows:
SECTION 3.01. Valid Organization and Execution. (a) In the
case of a Stockholder that is not a natural person: (i) the Stockholder is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization and has all necessary corporate or partnership
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(ii)
3
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action (corporate or partnership) on the part of the Stockholder; and (iii) this
Agreement has been duly executed and delivered by or on behalf of the
Stockholder. In the case of a Stockholder that is a natural person: (i) the
Stockholder has full legal right, power and authority to enter into this
Agreement and to perform such Stockholder's obligations hereunder without the
need for the consent of any other person or entity; and (ii) this Agreement has
been duly authorized, executed and delivered by such Stockholder.
SECTION 3.02. No Conflict. The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder (i) shall not, result in the creation of a lien or encumbrance
on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Stockholder is a party or by which the Stockholder or the Shares is bound or
affected, (ii) to the knowledge of the Stockholder, does not contravene or
violate any laws, rules or regulations applicable to it, him or her; (iii) in
the case of a Stockholder who is not a natural person, conflict with or violate
the Certificate of Incorporation or By-Laws or similar organizational document
of the Stockholder, and (iv) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority,
domestic or foreign, except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, or the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Xxxxxx Act").
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record and beneficial owner of the number of shares of Common
Stock set forth in the second recital. Such Shares are all the securities of the
Company owned, either of record or beneficially, by the Stockholder. The Shares
are owned by the Stockholder free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever except under applicable securities laws. The Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. At the Closing, such Stockholder will deliver good
and valid title to the Shares free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement or applicable securities laws.
SECTION 3.04. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Stockholder.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
-----------------------------------------------
International hereby represents and warrants to the
Stockholder as follows:
SECTION 4.01. Due Organization, Etc. International is a
corporation duly organized and validly existing under the laws of Ontario.
International has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by International have been duly authorized by
all necessary corporate action on the part of International. This Agreement has
been duly executed and delivered by International.
SECTION 4.02. No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by International do not, and the
performance of this Agreement by International will not, (i) conflict with or
violate the Articles of Incorporation or By-laws of International; or any law,
rule or regulation to which International is subject and (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental authority, domestic or foreign, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, or the
Xxxx-Xxxxx Xxxxxx Act.
SECTION 4.03. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of International.
ARTICLE V
COVENANTS OF THE STOCKHOLDER
----------------------------
SECTION 5.01. No Disposition or Encumbrance of Shares. The
Stockholder, except as contemplated by this Agreement, will not (i) sell,
transfer, tender, assign, contribute to the capital of any entity, hypothecate
or otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, any of the Shares (or agree or consent
to, or offer to do, any of the foregoing), (ii) take any action that would have
the effect of preventing or disabling the Stockholder from performing its
obligations hereunder, or (iii) directly or indirectly, initiate, solicit or
encourage any person to take actions that could reasonably be expected to lead
to the occurrence of any of the foregoing.
SECTION 5.02. No Solicitation of Transactions. The
Stockholder, between the date of this Agreement and the date of termination of
this Agreement, will not and will not authorize or, to the extent it is within
the Stockholder's power, permit any of the Stockholder's related or subsidiary
companies and trusts, partners, management, shareholders or trustees, or any of
such Stockholder's related or subsidiary companies and trusts, and financial
advisers, investment dealers or others acting as agent or otherwise for such
Stockholder or any of the foregoing, except in dealing with International and
Merger Sub or otherwise in furtherance of the
5
Merger, to provide information or access for review, enter into any agreement,
have any discussions, negotiations or correspondence or take any other action
related to or with a view to soliciting, encouraging, assisting in or
cooperating with any offer or proposal for, or which would have an effect
comparable to any acquisition (including by way of amalgamation or a merger) of
Common Stock (in whole or in part) or any material portion of the Company's or
any subsidiary of the Company's assets or business, any financing of any
acquisition thereof or financing of the Company or any subsidiary of the Company
or any material change in the management or operation (including by way of
material divestiture, partnership or joint venture) of the business of the
Company or any subsidiary of the Company. The Stockholder immediately shall
cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any persons conducted heretofore with
respect to any of the foregoing; provided that in the case of a Stockholder who
is a member of the Board of Directors of the Company (a "Director"), nothing in
this Section 5.02 shall be construed as interfering with or limiting such
Director's ability to comply with Section 6.04 of the Merger Agreement, as
required. Such Stockholder by signing this Agreement hereby acknowledges that
any actions taken by such Stockholder or any other person pursuant to Section
6.04(b) of the Merger Agreement shall have no effect on his or her obligations
or his or her full performance hereunder or on the rights of International
hereunder.
SECTION 5.03. Regulatory and Other Authorizations; Notices and
Consents. The Stockholder agrees to use all reasonable efforts to cooperate with
International in supporting and defending this Agreement against any third party
and in obtaining all authorizations, consents, orders and approvals of all
governmental authorities and officials that may be or become necessary for the
execution and delivery of, and the performance of its, his or her obligations
pursuant to, this Agreement. Each party hereto agrees to make an appropriate
filing, if necessary, pursuant to the Xxxx-Xxxxx Xxxxxx Act.
ARTICLE VI
TERMINATION
-----------
SECTION 6.01. Termination. This Agreement, except for Section
2.02(b), if applicable, shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the effective time of the Merger, (b)
the seventh calendar day following the date of termination of the Merger
Agreement, other than a termination in connection with an International
Termination Event, (c) the date of termination of the Merger Agreement in
connection with an International Termination Event, and (d) by the written
mutual consent of the parties hereto. Notwithstanding the foregoing, in the
event any Option shall have been exercised in accordance with Article II, but
the Closing shall not have occurred, the provisions of Articles I and III and
Section 2.03 shall survive until the Closing. Nothing in this Section 6.01 shall
relieve any party of liability for any breach of this Agreement.
6
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.02. Further Assurances. The Stockholder and
International will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 7.03. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were breached, and in the event of such breach the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
SECTION 7.04. Entire Agreement. This Agreement constitutes the
entire agreement between International and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between International and the Stockholder with respect to
the subject matter hereof.
SECTION 7.05. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party to this Agreement may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 7.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any Federal or state court sitting in the
Borough of Manhattan, The City of New York.
SECTION 7.07. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial
7
advisors and accountants (collectively, "Professionals") (to the extent the
Stockholder retains its own Professionals) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Merger shall have
occurred.
SECTION 7.08. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery or by telecopy to the respective parties at the following addresses or
telecopy numbers (or at such other address for a party as shall be specified in
a notice given in accordance with this Section 7.08):
(a) if to the Stockholder:
Woodbourne Partners,LP
c/o Clayton Management Co.
000 X Xxxxxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx
00000-0000
(b) if to International:
Hub International Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxx Xxxxx, Vice President
SECTION 7.09. Currency. All amounts in this Agreement are
stated and shall be paid in United States dollars.
SECTION 7.10. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 7.11. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
Stockholder and International (which consent may be granted or withheld in the
sole discretion of the Stockholder or International); provided, however, that
International may assign this Agreement to an affiliate of International without
the consent of the Stockholder, in which event International will remain jointly
and severally liable with such affiliate for all of such affiliate's obligations
hereunder and such affiliate of International shall agree to be bound by the
provisions of this Agreement.
8
SECTION 7.12. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 7.13. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 7.14. Transfer of Shares. The Stockholder is hereby
permitted to transfer or sell any or all of such Stockholder's Shares, if and so
long as, (a) International is notified of such transfer or sale at least 2
Business Days (as defined in the Merger Agreement) prior to such transfer or
sale, (b) at or prior to such transfer or sale, the transferee executes a Stock
Option and Voting Agreement identical to this Agreement which shall apply to all
of the Common Stock being transferred to such transferee by the Stockholder and
(c) at or prior to the time of transfer or sale, the Stockholder shall enter
into an amended Stock Option and Voting Agreement with respect to the Shares
retained by it, him or her which shall be identical to this Agreement except
that the number of Shares in the second recital shall reflect that number of
Shares then owned by the Stockholder.
9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
WOODBOURNE PARTNERS, LP
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
As President of Xxxxxxx Management Company,
the sole General Partner of Woodbourne Partners LP
HUB INTERNATIONAL LIMITED
By: /s/ W. Xxxx Xxxxx
Name: W. Xxxx Xxxxx
Title: Vice President and
General Counsel
10
STOCK OPTION AND VOTING AGREEMENT
Between
XXXX INVESTMENTS, LP
and
HUB INTERNATIONAL LIMITED
Dated as of January 19, 2001
STOCK OPTION AND VOTING AGREEMENT dated as of January 19, 2001,
between Xxxx Investments, LP (the "Stockholder"), a stockholder of Xxxx Group
Inc., a Delaware corporation (the "Company"), and Hub International Limited, an
Ontario corporation ("International").
WHEREAS, the Agreement and Plan of Merger dated the date hereof
between the Company, International and 416 Acquisition Inc., a Delaware
Corporation and a wholly-owned subsidiary of International ("Merger Sub"), as
amended from time to time (the "Merger Agreement"), provides, among other
things, that the Merger Sub will merge with and into the Company as contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the record and
beneficial owner of 2,216,140 shares of Common Stock, par value U.S.$.01 per
share, of the Company (the "Common Shares") (the Stockholder's shares of Common
Stock together with any Common Stock acquired after the date hereof, including
upon the exercise of warrants or options, the conversion of convertible
securities or otherwise, are referred to as the "Shares");
WHEREAS, as a condition to the willingness of International to
enter into the Merger Agreement, International has requested that the
Stockholder agree, and in order to induce International to enter into the Merger
Agreement, the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, as of the date hereof, International and certain other
holders of Common Stock are entering into stock option and voting agreements
whereby, among other things, such stockholders are granting options to
International (the "Remaining Options") for the Common Stock held by such
stockholders.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
SECTION 1.01. Voting Agreement. The Stockholder, from and after
the date hereof and until this Agreement shall have been terminated in
accordance with Article VI hereof, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, will vote (or cause to be voted) the Shares (i) in favor of the
approval and adoption of the Merger Agreement, the Merger and all of the
transactions contemplated by the Merger Agreement, and this Agreement, (ii)
against any merger, consolidation, sale of assets, recapitalization or other
business combination involving the Company (other than the Merger) or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which would result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled, and (iii)
in favor of any
other proposal as may be necessary to consummate the Merger if such proposal is
neutral or advantageous to the Stockholder and such proposal is reasonably
feasible and is not contrary to applicable laws and regulations. The Stockholder
shall not enter into any agreement or commitment with any person or entity to
vote or give instructions in any manner inconsistent with this Section 1.01.
ARTICLE II
THE OPTION
SECTION 2.01. Grant of Option. The Stockholder hereby grants to
International an irrevocable option ("the Option") to purchase the Shares in the
manner and for the Purchase Price (as defined below) set forth below in this
Article.
SECTION 2.02. Exercise of Option. (a) The Option may be exercised
by International as a whole together with the Remaining Options but not in part,
at any time prior to 5:00 p.m. (Toronto time) on the seventh calendar day
following the termination of the Merger Agreement, provided, that International
may not exercise the Option if the Company has terminated the Merger Agreement
after notice to International of a breach by International of the Merger
Agreement (an "International Termination Event").
(b) If prior to the termination of the Merger Agreement,
there shall have been made an announcement by a third party or notice by the
Company to International of a Superior Proposal, as that term is defined in
Section 9.04(m) of the Merger Agreement, and the Merger Agreement is terminated,
International may elect to (i) exercise the Option pursuant to paragraph (a) of
this Section 2.02, or (ii) within seven calendar days after such termination
inform the Stockholder in writing that it will not exercise the Option but will
participate in the proceeds received by the Stockholder from any consummation of
any sale of the Stockholder's Shares (pursuant to such Superior Proposal or
otherwise) that closes within one year after termination of the Merger Agreement
by receiving from the Stockholder the Participation Amount as defined in this
paragraph (b). The Stockholder will promptly upon receipt by it pay to
International 50% of the proceeds (net of expenses and transfer taxes) it
receives from the closing of a sale of the Stockholder's Shares in excess of
U.S.$14 per Share (the "Participation Amount") provided however for purposes of
this Article II only "Shares" shall be defined as the Stockholder's shares of
Common Stock owned as of the date hereof, which shall include shares of Common
Stock issued from the date hereof upon the exercise options or warrants, the
conversion of convertible securities or otherwise, but shall not include any
Common Stock acquired by the Stockholder by purchases in the open market from
the date hereof.
(c) If International decides to exercise the Option,
International shall send a written notice to the Stockholder of its intention to
exercise the Option, specifying the place, the time and the date (the "Closing
Date") of the closing (the "Closing") of the purchase. The Closing Date shall
occur on the fifth business day after the date on which such notice is
delivered.
(d) At the Closing, the Stockholder shall deliver to
International (or its designee) all of the Shares by delivery of a certificate
or certificates evidencing the Shares duly
2
endorsed to International or accompanied by stock powers duly executed in favor
of International, with all necessary stock transfer stamps and signature
guarantees affixed.
SECTION 2.03. Purchase Price. (a) The purchase price for each
Share shall be U.S.$14 payable, as adjusted in accordance with the provisions of
Section 2.08 of the Merger Agreement, if applicable, as follows: (A) net amount
of U.S.$9.3334 in cash, without interest thereon, (the "Cash Component") and (B)
U.S.$4.6666 principal amount of a Parent Debenture (as defined in the Merger
Agreement) (the "Debenture Component" and together with the Cash Component, the
"Purchase Price"). If pursuant to Section 2.04 of the Merger Agreement, Parent
elects to increase the Cash Component and decrease the Debenture Component then
the Parent shall make the same adjustment to the Purchase Price.
(b) In the event that subsequent to International exercising
its Option, any acquisition (including by way of amalgamation or merger) of the
Company's Common Stock (in whole or in part), or all or any substantial portion
of the assets or business of the Company, in any case by International or any of
its affiliates, is consummated, International shall distribute to the
Stockholder 50% of the consideration per Share in excess of U.S.$14 that would
have been paid to the Stockholder if the Option were not exercised. Such
consideration shall be paid by International at the same time and in the same
manner as such consideration is paid to the stockholders of the Company.
(c) If International shall have exercised its Option pursuant
to Section 2.02(b) and shall have disposed of the Company's Common Stock
acquired pursuant to such Option as a result of a Superior Proposal,
International shall distribute to the Stockholder securities or cash with a
value per Share equal to 50% of the cash or securities (net of expenses and
transfer taxes) in excess of U.S.$14 per Share acquired under such Superior
Proposal ("Excess Proceeds"). If the consideration received by International in
the Superior Proposal includes securities, the portion of the Excess Proceeds
that is paid over to the Stockholder will be satisfied with securities and cash
in the same proportion as the portion of securities and cash received by
International that constitutes Excess Proceeds. For purposes of the foregoing
only, the value of any such securities, if not specifically stated in the
agreement or other documentation entered into in connection with the Superior
Proposal by the parties thereto, shall, except as may be agreed between the
Stockholder and International, be deemed to be the fair value determined by an
independent investment banker of recognized standing appointed by International.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to International as
follows:
SECTION 3.01. Valid Organization and Execution. (a) In the case of
a Stockholder that is not a natural person: (i) the Stockholder is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization and has all necessary corporate or partnership
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby;
(ii)
3
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action (corporate or partnership) on the part of the Stockholder; and (iii) this
Agreement has been duly executed and delivered by or on behalf of the
Stockholder. In the case of a Stockholder that is a natural person: (i) the
Stockholder has full legal right, power and authority to enter into this
Agreement and to perform such Stockholder's obligations hereunder without the
need for the consent of any other person or entity; and (ii) this Agreement has
been duly authorized, executed and delivered by such Stockholder.
SECTION 3.02. No Conflict. The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder (i) shall not, result in the creation of a lien or encumbrance
on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which the
Stockholder is a party or by which the Stockholder or the Shares is bound or
affected, (ii) to the knowledge of the Stockholder, does not contravene or
violate any laws, rules or regulations applicable to it, him or her; (iii) in
the case of a Stockholder who is not a natural person, conflict with or violate
the Certificate of Incorporation or By-Laws or similar organizational document
of the Stockholder, and (iv) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority,
domestic or foreign, except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, or the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Xxxxxx Act").
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record and beneficial owner of the number of shares of Common
Stock set forth in the second recital. Such Shares are all the securities of the
Company owned, either of record or beneficially, by the Stockholder. The Shares
are owned by the Stockholder free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever except under applicable securities laws. The Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. At the Closing, such Stockholder will deliver good
and valid title to the Shares free and clear of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrance of any kind,
other than pursuant to this Agreement or applicable securities laws.
SECTION 3.04. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Stockholder.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INTERNATIONAL
International hereby represents and warrants to the Stockholder as
follows:
SECTION 4.01. Due Organization, Etc. International is a
corporation duly organized and validly existing under the laws of Ontario.
International has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by International have been duly authorized by
all necessary corporate action on the part of International. This Agreement has
been duly executed and delivered by International.
SECTION 4.02. No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by International do not, and the
performance of this Agreement by International will not, (i) conflict with or
violate the Articles of Incorporation or By-laws of International; or any law,
rule or regulation to which International is subject and (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental authority, domestic or foreign, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, or the
Xxxx-Xxxxx Xxxxxx Act.
SECTION 4.03. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of International.
ARTICLE V
COVENANTS OF THE STOCKHOLDER
SECTION 5.01. No Disposition or Encumbrance of Shares. The
Stockholder, except as contemplated by this Agreement, will not (i) sell,
transfer, tender, assign, contribute to the capital of any entity, hypothecate
or otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, any of the Shares (or agree or consent
to, or offer to do, any of the foregoing), (ii) take any action that would have
the effect of preventing or disabling the Stockholder from performing its
obligations hereunder, or (iii) directly or indirectly, initiate, solicit or
encourage any person to take actions that could reasonably be expected to lead
to the occurrence of any of the foregoing.
SECTION 5.02. No Solicitation of Transactions. The Stockholder,
between the date of this Agreement and the date of termination of this
Agreement, will not and will not authorize or, to the extent it is within the
Stockholder's power, permit any of the Stockholder's related or subsidiary
companies and trusts, partners, management, shareholders or trustees, or any of
such Stockholder's related or subsidiary companies and trusts, and financial
advisers, investment dealers or others acting as agent or otherwise for such
Stockholder or any of the foregoing, except in dealing with International and
Merger Sub or otherwise in furtherance of the
5
Merger, to provide information or access for review, enter into any agreement,
have any discussions, negotiations or correspondence or take any other action
related to or with a view to soliciting, encouraging, assisting in or
cooperating with any offer or proposal for, or which would have an effect
comparable to any acquisition (including by way of amalgamation or a merger) of
Common Stock (in whole or in part) or any material portion of the Company's or
any subsidiary of the Company's assets or business, any financing of any
acquisition thereof or financing of the Company or any subsidiary of the Company
or any material change in the management or operation (including by way of
material divestiture, partnership or joint venture) of the business of the
Company or any subsidiary of the Company. The Stockholder immediately shall
cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any persons conducted heretofore with
respect to any of the foregoing; provided that in the case of a Stockholder who
is a member of the Board of Directors of the Company (a "Director"), nothing in
this Section 5.02 shall be construed as interfering with or limiting such
Director's ability to comply with Section 6.04 of the Merger Agreement, as
required. Such Stockholder by signing this Agreement hereby acknowledges that
any actions taken by such Stockholder or any other person pursuant to Section
6.04(b) of the Merger Agreement shall have no effect on his or her obligations
or his or her full performance hereunder or on the rights of International
hereunder.
SECTION 5.03. Regulatory and Other Authorizations; Notices and
Consents. The Stockholder agrees to use all reasonable efforts to cooperate with
International in supporting and defending this Agreement against any third party
and in obtaining all authorizations, consents, orders and approvals of all
governmental authorities and officials that may be or become necessary for the
execution and delivery of, and the performance of its, his or her obligations
pursuant to, this Agreement. Each party hereto agrees to make an appropriate
filing, if necessary, pursuant to the Xxxx-Xxxxx Xxxxxx Act.
ARTICLE VI
TERMINATION
SECTION 6.01. Termination. This Agreement, except for Section
2.02(b), if applicable, shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the effective time of the Merger, (b)
the seventh calendar day following the date of termination of the Merger
Agreement, other than a termination in connection with an International
Termination Event, (c) the date of termination of the Merger Agreement in
connection with an International Termination Event, and (d) by the written
mutual consent of the parties hereto. Notwithstanding the foregoing, in the
event any Option shall have been exercised in accordance with Article II, but
the Closing shall not have occurred, the provisions of Articles I and III and
Section 2.03 shall survive until the Closing. Nothing in this Section 6.01 shall
relieve any party of liability for any breach of this Agreement.
6
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 7.02. Further Assurances. The Stockholder and
International will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 7.03. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
breached, and in the event of such breach the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
SECTION 7.04. Entire Agreement. This Agreement constitutes the
entire agreement between International and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between International and the Stockholder with respect to
the subject matter hereof.
SECTION 7.05. Amendment; Waiver. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto. Any party to
this Agreement may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
SECTION 7.06. Governing Law. This Agreement shall be governed by,
and construed in accordance with the laws of the State of New York applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any Federal or state court sitting in the Borough of
Manhattan, The City of New York.
SECTION 7.07. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial
7
advisors and accountants (collectively, "Professionals") (to the extent the
Stockholder retains its own Professionals) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Merger shall have
occurred.
SECTION 7.08. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
or by telecopy to the respective parties at the following addresses or telecopy
numbers (or at such other address for a party as shall be specified in a notice
given in accordance with this Section 7.08):
(a) if to the Stockholder:
Xxxx Investments, LP
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
(b) if to International:
Hub International Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxx Xxxxx, Vice President
SECTION 7.09. Currency. All amounts in this Agreement are stated
and shall be paid in United States dollars.
SECTION 7.10. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 7.11. Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the
Stockholder and International (which consent may be granted or withheld in the
sole discretion of the Stockholder or International); provided, however, that
International may assign this Agreement to an affiliate of International without
the consent of the Stockholder, in which event International will remain jointly
and severally liable with such affiliate for all of such affiliate's obligations
hereunder and such affiliate of International shall agree to be bound by the
provisions of this Agreement.
8
SECTION 7.12. No Third Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 7.13. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 7.14. Transfer of Shares. The Stockholder is hereby
permitted to transfer or sell any or all of such Stockholder's Shares, if and so
long as, (a) International is notified of such transfer or sale at least 2
Business Days (as defined in the Merger Agreement) prior to such transfer or
sale, (b) at or prior to such transfer or sale, the transferee executes a Stock
Option and Voting Agreement identical to this Agreement which shall apply to all
of the Common Stock being transferred to such transferee by the Stockholder and
(c) at or prior to the time of transfer or sale, the Stockholder shall enter
into an amended Stock Option and Voting Agreement with respect to the Shares
retained by it, him or her which shall be identical to this Agreement except
that the number of Shares in the second recital shall reflect that number of
Shares then owned by the Stockholder.
9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
XXXX INVESTMENTS, LP
By: Xxxx KINV, Inc., Managing General Partner
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
HUB INTERNATIONAL LIMITED
By: /s/ W. Xxxx Xxxxx
-----------------------------------
Name: W. Xxxx Xxxxx
Title: Vice President and
General Counsel
